Irish consumer sentiment falls back from post-Brexit high

Reuters Staff

2 Min Read

DUBLIN (Reuters) - Irish consumer sentiment fell back from a 17-month high in August, a survey showed on Wednesday, as consumers reported only limited gains in their personal finances from a healthy Irish economy.

Ireland’s economy has posted the fastest growth in Europe for the past three years and unemployment has fallen rapidly but that has failed to buoy consumers, many of whom are experiencing an uneven recovery and rising living costs.

The KBC Bank Ireland/ESRI Consumer Sentiment Index dipped to 102.9 last month from 105.1 in July, its highest level since February last year. The index hit a 15-year high of 108.6 in January 2016 before Britain’s vote to leave the European Union.

While consumers were increasingly positive about the prospects for the Irish economy and the outlook for jobs, they were less confident of their personal financial prospects in 12 months’ time and about the potential for major purchases.

Only 25 percent of consumers reported a clear improvement in their personal financial circumstances in the past 12 months, while 27 percent forecast they would improve in the coming year.

“A key message of the survey for some time is that it is not possible to equate the scale of improvement in the Irish economy at large with the change in fortunes of the average Irish consumer,” KBC chief economist Austin Hughes said.

“With income growth for many modest at best and significant ‘legacy’ problems from the crisis, pressures on household finances remain widespread.”

Fifty-three percent of consumers said they expected the economy to strengthen further in the next twelve months, while 13 percent expected a deterioration.